Types of Aid
Taking out loans to pay for a Rocky Mountain College education is an investment in your future that will pay for itself many times over. Student loans, unlike grants and work study, are legal obligations that you will have to repay, with interest, just like car loans and home mortgages. How much student loan debt you should borrow is a very personal decision. Your student loan dollars should be used only for items directly related to your college education. We encourage you to borrow responsibly and only what you need to cover your costs. See our Financial Literacy Page to help you decide how much you should borrow.
Please read the Department of Education's Direct Loan Page for Students for more information regarding federal student loans. If you choose to borrow a federal student loan, information about it will be submitted to the National student Loan Data System (NSLDS) and will be accessible by you to help you keep track of what you borrow, as well as guarantee agencies, lenders, and institutions determined to be authorized users of the data system.
Federal Direct Student Loans
Subsidized Direct Loan – Awarded on the basis of financial need as determined by the Free Application for Federal Student Aid (FAFSA). Awarded by the Rocky Mountain College Financial Aid Office to students enrolled at least half time. No interest is charged while the student is in school, but interest will start accruing once the student goes into repayment or during periods of forbearance.
Unsubsidized Direct Loan – Awarded to students who file the Free Application for Federal Student Aid (FAFSA). It is not necessary to demonstrate financial need to receive this loan. Awarded by the Rocky Mountain College Financial Aid Office to students enrolled at least half time. Unlike the subsidized direct loan, the unsubsidized direct loan accrues interest while the student is in school.
The maximum amount you can borrow each year in direct subsidized and unsubsidized loans depends on your grade level and on whether you are a dependent or independent student. The following table shows the maximum amount of money you may borrow each academic year in direct subsidized and unsubsidized loans:
|Dependent student*||Independent student**|
|1st-year undergraduate||$5,500 (maximum $3,500 subsidized)||$9,500 ($3,500)***|
|2nd-year undergraduate||$6,500 (maximum $4,500 subsidized)||$10,500 ($4,500)|
|3rd- & 4th-year undergraduate||$7,500 (maximum $5,500 subsidized)||$12,500 ($5,500)|
|Graduate/professional||NA (All graduate and professional
students are considered independent.)
*Except those whose parents are unable to borrow a PLUS loan.
**These limits also apply to dependent students whose parents are unable to borrow a PLUS loan.
***The numbers in parentheses represent the maximum amount that may be subsidized.
The actual loan amount you are eligible to receive for an academic year is determined by the Financial Aid Office and may be less than the maximum annual amounts shown in the chart above.
There are aggregate loan limits as well. Subsidized and unsubsidized aggregate loan limits for dependent undergraduate students is $31,000 - no more than $23,000 of this amount may be in subsidized loans. For independent students and dependent students whose parents cannot borrow PLUS the aggregate limit is $57,500 – no more than $23,000 of this may be subsidized. $138,500 is the limit for graduate or professional students - no more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.
When a student has received subsidized loans for 150% of the published length of the academic program in which he or she is enrolled, he or she may not receive additional subsidized loans for enrollment in that program. This rule applies to any new* borrowers on or after July 1, 2013.
For the 2020-2021 academic year, the interest rate on these loans for undergraduate students is fixed at 2.75%. The interest rate on the Unsubsidized Direct Loan for Graduate/Professional students is fixed at 4.3%. Federal Direct Stafford subsidized and unsubsidized Loans also have a loan fee of 1.062%. The loan fee is deducted from the loan before the funds are disbursed to the institution.
Federal regulations require all students borrowing a direct loan for the first time to participate in loan entrance counseling before receiving the first disbursement of their loan. The purpose of this session is to help you understand your rights and obligations as a student loan borrower. The session should take approximately 15 to 20 minutes to complete.
In order to borrow a federal direct loan, you must complete a Master Promissory Note (MPN). The MPN is a legal agreement to repay your loan to the U.S. Department of Education. Once you complete an MPN, it is good for ten years.
Federal Direct Parent Loan (PLUS)
Annual available amount: Cost of attendance minus other aid. Repayment of principal and interest (fixed at 5.3%) generally begins once the loan is fully disbursed (paid out). However, parents may request a deferment while their child is enrolled at least half-time and for an additional six months after the child graduates, leaves school, or drops below half-time enrollment. During any period when the parent is not required to make payments, interest will accrue on the loan. Parents may choose to pay the accrued interest or allow the interest to be capitalized (added to the loan principal balance) when they have to start making payments. Parents have a choice of repayment plans. Federal Direct Parent Loans have a loan fee of 4.236.
Qualifications: Parent must be credit worthy, as determined by the credit check performed by the U.S. Department of Education.
Please read the Department of Education's federal loan information for parents for more information regarding federal Direct Parent PLUS loans.
All parent borrowers must complete the following (in order):
- Federal Direct PARENT PLUS Loan Application/Authorization - This must be completed yearly or with each loan request. Forms must be submitted to the Rocky Mountain College Financial Aid Office. PLUS Loan requests will not be processed until this document is received. PLUS loan funds will be disbursed equally between Fall and Spring semesters. To help determine the annual loan amount to apply for, refer to the student’s registration billing statement that includes course schedule, total tuition, fees, housing and meal plan costs, expected financial aid, and remaining balance due, and use our Loan Calculator, or contact the financial aid office at email@example.com or call 800.877.6259 ext. 1031.
- PLUS Master Promissory Note (PMPN) - Complete a PMPN for each dependent student attending college. Once you complete a PMPN, it is good for 10 years.
Federal Direct Grad PLUS Loan
For students in graduate programs only. Annual available amount: Cost of attendance minus other aid. Interest rate is fixed at 5.30%. Federal Direct Grad PLUS Loans have a loan fee of 4.236. Graduate or professional students don't have to make any payments while enrolled in school at least half-time, and for an additional six months after they graduate, leave school, or drop below half-time enrollment. During any period when a student is not required to make payments, interest will accrue on the loan. Students may choose to pay the accrued interest or allow the interest to be capitalized (added to the loan principal balance) when they have to start making payments. The loan servicer will notify the student when the first payment is due.
Qualifications: Student must be credit worthy, as determined by the credit check performed by the U.S. Department of Education. First time Grad PLUS loan borrowers must complete a Grad PLUS Master Promissory Note (PMPN). Once you complete a PMPN, it is good for ten years.
All Grad PLUS Loan borrowers must complete a Consent to Obtain Credit Report Form each year and submit it to the Rocky Mountain College Financial Aid Office. Grad PLUS Loan requests will not be processed until this document is received.
Federal regulations require all students borrowing a Direct Grad Plus Loan for the first time to participate in loan entrance counseling before receiving the first disbursement of their loan. The purpose of this session is to help you understand your rights and obligations as a student loan borrower. The session should take approximately 15 to 20 minutes to complete.
Alternative loans, also called private student loans, are available to students who need additional funds to meet educational expenses. The student's loan eligibility is determined by the cost of attendance less other financial aid or the annual loan maximum amount as determined by the lender. In addition, the lender will look at your credit history and other factors to determine if they will lend to you. One lender might deny you while the next approves you because of the different ways they interpret your information. Students may apply for these loans on their own, but oftentimes will need a cosigner.
Alternative loans are not for everyone. They can be expensive and should only be utilized when all other federal resources, such as Federal Direct Student Loans and Federal Direct Parent PLUS loans, have been exhausted. Please read this Plain Language Disclosure for Direct Subsidized Loans and Direct Unsubsidized Loans William D. Ford Federal Direct Loan Program before borrowing an alternative loan.
Please visit FASTChoice for possible alternative loan lenders. The lenders and loan options presented in FASTChoice include all lenders who made a loan at RMC within the last four years and allow you to compare them easily. You are free to choose any lender, including those not presented. If you choose a lender that is not presented, please contact the financial aid office. Application processing will not be delayed unnecessarily if you choose a lender not presented.